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Chevron Australia Abandons Transfer Pricing Court Challenge

22 August 2017

Following, Chevron Australia’s abandoned court challenge over disputed taxes and penalties arising from an intra-group loan, Zara Ritchie, Global Lead, Transfer Pricing, at BDO said:

“This settlement will no doubt give the ATO greater confidence and resolve to go after what it perceives to be aggressive financing arrangements.

“In practice it won’t matter whether the Federal Court decision sets a legal precedent or not.  This approach is already happening under current ATO reviews.

“Messaging from the ATO supports the view that they believe there are many aggressive arrangements in place and often with low tax jurisdictions on the other side or hybrid arrangements.

“Corporates are nervous about this aggressive stance and of course the reputational risk of poor publicity.  Australia’s ‘stick’ approach to change behaviour and restructure arrangements (eg MAAL) is likely to have the same impact in financing arrangements.”